Getting started with your budget
Welcome to Family Budgeting Basics. This is our first lesson, and I want to keep the start of it simple. Today we're going to cover one idea — checking the money you actually spent against the money you think you spent — and then I'll send you home with a short exercise to try before we meet again. That's the whole plan for tonight, so there's no need to get ahead of it.
Early in our marriage, before the kids came along, I sat down one night to balance the checkbook and it simply would not balance. This was back when balancing a checkbook meant a pen and paper, worked against a little paper statement the bank mailed you. My number and the bank's number were off by about forty dollars, and try as I might, I could not figure out why.
Now, forty dollars was never going to sink us — I want to be clear about that, because I'd hate for anyone to hear this and think it's a story about being broke. It isn't. The trouble was that I didn't know. And I've never once in my life been able to let a not-knowing sit. So I got out a legal pad — yellow, the cheap kind — and I went through every single line of that statement against every entry in my checkbook, one at a time, almost out loud, until I found it.
It was a magazine subscription. Rodney had renewed it and never mentioned it, most likely because it didn't cross his mind that it mattered. To him it was four dollars. To me it was the gap between the number I trusted and the number that was actually true, and those two have to be the same number, or the whole system is just decoration.
I still bring it up now and then. Gently. He knows it's coming.
What that night actually taught me
If there's one thing I'd like you to carry out of this lesson, it's this, because the whole module rests on it. You don't lose track of your money because you're bad at math. You lose track of it because no one ever sits down and checks the actual number against the number they think is true. That's all it is. Most of the time, that's the entire mystery.
So tonight, before you head home, I'd like you to do your own version of what I did at that kitchen table. Not the whole budget — we're not there yet, and there's no rush. Just this much:
Step one. Pull up your bank account however you normally look at it — an app, a paper statement, it truly doesn't matter.
Step two. Get a notebook. Not a spreadsheet, and I'll explain why in just a moment. Just a notebook you're going to keep coming back to.
Step three. Go back through the last thirty days and write down every single thing that came out. Every one. Don't categorize it yet, don't judge it yet — just write it in a column.
Step four. Add it up by hand. Then compare it to what you thought you spent.
Most people are off. Usually by more than they'd ever guess — so if that's you, you're in very good company.
Why paper, and why by hand
Here I'll give you an opinion straight out, because I hold it firmly. Spreadsheets are overrated for regular people. I've tried them over the years, more than once, and this is what tends to happen: Rodney bumps a formula without knowing he bumped it, or I open the thing three weeks later and can't recall what I meant by a column, and eventually it just... stops getting opened. A notebook you actually write in, with a pen, beats a perfect spreadsheet sitting closed on somebody's desktop. The little bit of friction in writing by hand is doing something for your brain that clicking a cell doesn't. I can't prove that to you scientifically. I can prove it with about thirty years of my own habits.
The choir thing
I sang in choirs for years — several of them, different wards, different seasons of life — and there's something about singing your own part that lands here dead straight across. You can't fake your part in a choir. Everyone around you hears it the second you're off, even when you can't quite hear it yourself. And the fix is never some clever trick. The fix is doing the boring practice, the same four measures, over and over, until it's right.
A budget is just the same. You can't fake your own numbers. Reality hears it even when you'd rather not look. And there's no shortcut around sitting down and doing the boring part, which is writing down what really happened with the money — not what you meant to happen.
That night with the legal pad, I wasn't doing anything clever. I was going line by line, slow and boring, until the truth showed up. Forty dollars, one renewed magazine. A small thing. But it's the very same muscle you'll use on the big things later in this course, so we're starting here on purpose.
One caution, plain and simple, and please don't skip past it: if you're looking at joint accounts with a spouse or partner, do this together if you can, or at least let them know you're doing it. Nobody likes finding out after the fact that their spending got put under a magnifying glass without a word of warning. It's far better to say "hey, I'm trying to figure out where things are going" up front than to have it feel like an accusation later on.
Before next time: bring that thirty-day list to class, along with your most recent pay stub or income number. We're going to start building the real thing with your real numbers — not a pretend example — so please come with the actual paper in hand...